Phillip Paulwell | Tackling electricity theft: A call for action on JPS

Electricity theft, or non-technical losses, is a pervasive issue faced by utilities worldwide, and the Jamaica Public Service (JPS) is no exception. For years, paying customers have absorbed the costs associated with these losses, which undermine the promise of affordable electricity. As the opposition spokesman on energy, I contend that combating these losses should be a fundamental priority for the JPS; however, the data suggests otherwise.

A review of the JPS’s loss statistics from 2014 to 2023 reveals a troubling trend: the percentage of total losses has remained alarmingly high, fluctuating between 25.9 per cent and 28.4 per cent. Specifically, non-technical losses due to theft have averaged around 20 per cent of net generation. Despite various strategies implemented to curb theft, including the deployment of technology and dedicated strike forces, the JPS has seen little to no significant improvement in reducing these losses.

In 2018, the JPS’s Director of Losses Operations and Analytics, Rasheed Anderson, estimated that over 200,000 households and businesses were engaged in electricity theft. This staggering figure represents approximately 30 per cent of the JPS’s customer base. The company’s annual reports indicate that while technical losses are estimated at 7.67 per cent, the reality is that theft accounts for a significant portion of the remaining losses. Incredibly, despite these challenges, the JPS has reported consistent profits ranging from US$ 26.5 million to US$ 97.2 million during this 10-year period, suggesting a lack of genuine incentive to address the problem of theft.

It is interesting to note that over the 10-year period between 2014 and 2023 the JPS lost close to 21 per cent of its net generation annually despite combining human (strike force) and supply restriction in ‘red zones’ with over 70 per cent theft, with technology-based strategies including million-dollar projects such as smart metering, residential automated and commercial automated metering infrastructure (RAMI & CAMI), total metering of transformers, and the implementation of the Advanced Automated Theft Detection Analytical Tool (AATDAT). Despite the JPS’ implementation of loss-reduction strategies including supply restriction, technology-based strategies, and strike forces, JPS has effectively failed to protect itself and its customers from the impact of non-technical losses.

It is evident that the burden of these losses falls squarely on the shoulders of paying customers, who currently face some of the highest electricity prices in the Caribbean. Each customer contributes approximately 17 per cent of their bill to cover the costs associated with electricity theft. This situation is not only unjust but unsustainable as it perpetuates an environment where the JPS appears to profit from inefficiencies.

NON-FUEL ADJUSTMENT

Under the existing JPS licence, there is an annual non-fuel adjustment factor that includes a system losses incentive mechanism. This mechanism assigns varying levels of responsibility for losses between the JPS and external factors, allowing the utility to evade accountability for its role in managing theft. Meanwhile, the Office of Utilities Regulation (OUR) is responsible for monitoring the JPS’s performance, yet customer complaints about service quality continue to escalate. Reports indicate that the JPS accounted for nearly 40 per cent of customer complaints in 2011, with issues relating to billing and service dissatisfaction dominating the narrative.

What is particularly concerning is the lack of effective governmental support in addressing these systemic issues. In the past, initiatives were implemented to encourage low-income communities to resist electricity theft, alongside increased criminal sanctions for such actions. However, the current administration has failed to prioritise or enhance these efforts, leaving both the JPS and the consumer in a precarious position.

As we look globally, numerous countries have successfully reduced electricity theft through innovative measures. For instance, the Philippines has managed to curtail losses to approximately six per cent through a combination of advanced technology, strict legal repercussions for theft, and community engagement. In contrast, the JPS has struggled to implement similar strategies effectively even with substantial investments in smart metering and automated systems.

CRITICAL OPPORTUNITY

The upcoming renewal of the JPS’s licence in 2027 presents a critical opportunity for the Government to reassess the existing framework and ensure that it holds the JPS accountable for its performance. Any new agreement must prioritise reducing electricity theft and improving service delivery to consumers. This includes providing consumers with the option to choose their electricity provider or to generate their own power through renewable sources.

The existing JPS licence provides that the annual non-fuel adjustment factor includes a system losses incentive mechanism comprised of three elements: Technical Losses (TL), the portion of non-technical losses (theft) which is completely within JPS’ control (JNTL), and the portion of non-technical losses which is not completely within JPS’ control (GNTL). In this mechanism, JPS calculates system losses ‘true-up’ by disaggregating losses into these three components then measuring losses against a target set by the OUR in a formula that includes a responsibility factor (RF) ranging from zero per cent to 100 per cent determined also by the OUR.

Moving forward, it is imperative that the Government actively pursues measures to compel the JPS to take decisive action against electricity theft. It is essential to revisit the recommendations I proposed in a Private Members Motion over two years ago — recommendations that have, regrettably, been ignored. These proposals are designed to address the pressing need for reform within the JPS, ensuring that the utility prioritises efficiency and accountability over profit at the expense of consumers.

The discussion highlights the urgent need for amendments to be made to the new JPS licence, set for renewal in 2027. Based on its weak performance in the areas of losses control, operational efficiency, affordable prices, and weak service delivery to consumers, the Government must take steps to ensure that under the new licence, legitimate electricity consumers are not only protected but given the true option of choosing their service provider or improving their own generational capacity and control over their energy cost through renewables.

The fight against electricity theft in Jamaica is not just a matter of reducing losses for the JPS, It is about protecting the rights of consumers who are unfairly burdened by inefficiencies and high prices. The time for action is now. We must demand a utility that serves all Jamaicans equitably, ensuring that electricity theft is not tolerated and that every citizen has access to affordable, reliable power. Only then can we pave the way for a sustainable-energy future that benefits everyone in our society.

Phillip Paulwell is member of parliament for Kingston East and Port Royal and former minister of science, technology, energy, and mining. Send feedback to columns@gleanerjm.com.